Item 1.01.
|
Entry Into a Material Definitive Agreement
|
Indenture
On September 21, 2017, Station Casinos LLC (the Company) issued $550 million aggregate principal amount of 5.000% Senior Notes
due 2025 (the Notes) pursuant to an indenture, dated as of September 21, 2017 (the Indenture), among the Company, the guarantors party thereto (the Guarantors) and Wells Fargo Bank, National Association, as
Trustee. Interest on the Notes will be paid every six months in arrears on April 1 and October 1, commencing April 1, 2018.
The Notes and the guarantees are the Companys and the Guarantors general senior unsecured obligations. The Notes and the
guarantees rank equally in right of payment with all of the Companys and the Guarantors existing and future senior debt and senior in right of payment to all of the Companys and the Guarantors future subordinated debt. The
Notes and the guarantees are effectively junior to any of the Companys and the Guarantors existing and future debt that is secured by senior or prior liens on the collateral, including indebtedness under the Companys existing
credit facility and other secured debt permitted to be incurred pursuant to the terms of the Indenture governing the Notes, to the extent of the value of the collateral securing such obligations. The Notes and the guarantees are structurally
subordinated to all existing and future liabilities of the Companys subsidiaries that do not guarantee the Notes.
On or after
October 1, 2020, the Company may redeem all or a portion of the Notes upon not less than 30 nor more than 60 days notice, at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and
unpaid interest and additional interest, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on October 1 of the years indicated below:
|
|
|
|
|
Year
|
|
Percentage
|
|
2020
|
|
|
102.500
|
%
|
2021
|
|
|
101.250
|
%
|
2022 and thereafter
|
|
|
100.000
|
%
|
If the Company experiences certain change of control events (as defined in the Indenture governing the Notes),
it must offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest to the applicable repurchase date.
If the Company sells assets under certain circumstances and does not use the proceeds for specified purposes, the Company must offer to
repurchase the Notes at 100% of their principal amount, plus accrued and unpaid interest to the applicable repurchase date.
The Indenture
governing the Notes contains certain covenants limiting, among other things, the Companys and its restricted subsidiaries ability and the ability of its subsidiaries (other than its unrestricted subsidiaries) to:
|
|
|
pay dividends or distributions (other than customary tax distributions) or make certain other restricted payments or investments;
|
|
|
|
incur or guarantee additional indebtedness or issue disqualified stock or create subordinated indebtedness that is not subordinated to the Notes or the guarantees;
|
|
|
|
transfer and sell assets;
|
|
|
|
merge, consolidate, or sell, transfer or otherwise dispose of all or substantially all of our assets;
|
|
|
|
enter into certain transactions with affiliates;
|
|
|
|
engage in lines of business other than its core business and related businesses; and
|
|
|
|
create restrictions on dividends or other payments by our restricted subsidiaries.
|
These
covenants are subject to a number of exceptions and qualifications as set forth in the Indenture governing the Notes. The Indenture governing the Notes also provides for events of default which, if any of them occurs, would permit or require the
principal of and accrued interest on such Notes to be declared due and payable.
The foregoing description is qualified in its entirety by
reference to the full text of the Indenture governing the Notes, filed as Exhibit 4.1 hereto and incorporated by reference herein.
Credit Facility Amendment
On September 21, 2017 (the Fourth Amendment Effective Date), the Company, Red Rock Resorts, Inc., Station Holdco LLC, the
guarantor subsidiaries of the Company, Deutsche Bank AG Cayman Islands Branch, as administrative agent, and lenders party to that certain Credit Agreement dated as of June 8, 2016 (the Credit Agreement) entered into the Incremental
Joinder Agreement No. 4 and Fourth Amendment to Credit Agreement (the Amendment) pursuant to which the Credit Agreement was amended to, among other things, (a) extend the maturity date under each of the term A loan facility and
the revolving credit facility by one year to June 8, 2022; (b) set the Companys required quarterly principal payments on the term A-3 facility loan in an amount equal to approximately $3.4 million, payable on the last day of each
fiscal quarter beginning on December 31, 2017; (c) increase the outstanding amount of the term A-3 facility loans to approximately $272.5 million, (d) increase the outstanding borrowing availability of the revolving credit facility to
approximately $781.0 million and (e) modify the requirements that the Company maintain throughout the term of the Credit Agreement and measured at the end of each fiscal quarter, a maximum consolidated total leverage ratio of not more than
(i) 6.50 to 1.00 for the first fiscal quarter ending after the Fourth Amendment Effective Date through the fiscal quarter ending December 31, 2018, (ii) 6.25 to 1.00 for the fiscal quarter ending March 31, 2019, (iii) 6.00
to 1.00 for the fiscal quarter ending June 30, 2019 through the fiscal quarter ending September 30, 2019, (iv) 5.75 to 1.00 for the fiscal quarter ending December 31, 2019 through the fiscal quarter ending March 31, 2020,
(v) 5.50 to 1.00 for the fiscal quarter ending June 30, 2020 through the fiscal quarter ending September 30, 2020 and (vi) 5.25 to 1.00 the fiscal quarter ending December 31, 2020 and each fiscal quarter thereafter.
The Company intends to use the net proceeds from the issuance of the Notes and the Incremental Term A-3 Facility Loans to (a) repay the
Companys outstanding 7.50% Senior Notes due 2021, (b) repay outstanding revolving loans under the Revolving Facility to the extent of available proceeds, (c) pay fees and expenses in connection with the offering and the credit
facility amendment and (d) for general corporate purposes.
The foregoing description is qualified in its entirety by reference to
the full text of the Amendment, filed as Exhibit 10.1 hereto and incorporated by reference herein.